March 05, 2012

Getting a Handle on Geographic Emissions

With the recent addition of the scope 3 greenhouse gas emissions accounting standard, there is at least a broad understanding of how corporate emissions should be quantified and what the benefits would be – even if only a small number of companies have adopted it so far. On the other hand, emissions associated with geographic regions not only lack a rigorous accounting standard but are also more difficult to quantify. And yet they are just as important for getting smarter about our resource uses and emissions.

A geographic region can be a community, city, metropolitan area, rural area, state, province, multi-state region, or any other area. It can be as large as a country or as small as a university campus. A region can be both a consumer and a producer of a large number of end products. A region can simultaneously be in numerous value chains – sometimes in the middle, at other times at the end, and occasionally right at the beginning where raw materials are extracted from the ground. Materials and energy may flow into a region, and they may flow out in other forms into other places.

Conceptually, this is not very different from a corporation that draws materials and energy from upstream suppliers, consumes some of it internally, and produces goods or services for others to consume downstream. The difference really comes down to the scale and diversity.

Cities, for example, are huge consumers of resources and are home to over half of the world’s population. On every type of resource use and activity – including obvious ones such as the building stock, land use, energy use, transportation, food consumption, and waste disposal – cities dwarf even the largest global corporations. Developing a geographic emissions inventory is vastly different from developing a corporate inventory – upstream and downstream players are not easily identifiable, and data availability is often limited to aggregate information within the geographic boundary.

The IPCC guidelines for national emissions inventories offer the most basic approach to a geographic inventory, and are often used at city and regional scales as well. These guidelines cover specific sectors within the geographic boundary, including fuel combustion, industrial processes, agriculture, forestry, land use and waste disposal. The result is an inventory of territorial emissions that ignores all upstream and downstream emissions.

Looking only at territorial emissions leads to the phenomenon of outsourced emissions where the net effect of trade shifts emissions from one country or region to another. The United States, for example, is running a trade deficit around $500 billion, which means that emissions adjusted for imports and exports would be about 8-9% above the territorial emissions for energy use and industrial processes.

The same problem occurs at smaller geographic scales. If a city doesn’t produce its own electricity (and most cities don’t), then all emissions associated with electricity production would be ignored in a territorial inventory. In a corporate setting, this would be the equivalent to not counting any of the scope 2 emissions. This may be an easy problem to solve, but then what about the scope 3 emissions occurring not only in the upstream energy supply chain but also in the material supply chains? And what about the energy and materials exported to other places?

One answer to this is to change the focus from production to consumption, and account for exports and imports using economic data. An example of this is the recent consumption-based inventory published for the state of Oregon. Such a top-down approach can be complicated and time-consuming, and may still contain uncertainties because of considerable lags in the availability of trade data and inaccuracies in applying them at the level of a state or smaller boundary.

A bottom-up approach, relying on activity data collected from within a region, would resemble a corporate emissions inventory but would have to deal with some unique problems such as double counting of emissions. A minimum viable geographic emissions inventory (as outlined by the UNEP) would include:

Scope 1 (in-boundary) emissions for the IPCC sectors.

Scope 2 emissions from imported electricity and imported energy such as heating or cooling.

Scope 3 emissions from transmission/distribution losses for imported electricity, waste disposed outside the boundary, and marine/aviation fuel combustion (usually based on fuel loaded within the boundary).

Reduction of scope 1 emissions to account for the export of electricity or other energy, and import of waste.

This, of course, leaves out the upstream energy supply chain and the entire material supply chain. If material imports – such as construction materials and food – are included in the inventory, then it would be unreasonable not to adjust for materials exported to other regions. This immediately raises the data collection and analysis requirements to a level that could make it impractical for smaller regions such as cities. A number of academic studies (such as a recent University of Colorado study of US cities) have looked at this problem and have proposed compromise solutions that account for some of the missing pieces. Other issues – such as carbon sequestration in biomass and structures – have yet to be addressed.

It is clear that the state of the art in inventorying geographic emissions is far from being complete. Rather than being a purely accounting exercise, a geographic emissions inventory ultimately needs to provide insight into resource uses in a region and help generate better policies. Recent studies have shown that a wide range of factors influence emissions in urban areas. Some factors, such as climate and advantages of location, are fixed. But others – such as urban form, building stock, power generation, transport patterns and waste disposal methods – may be more amenable to changes in varying degrees. By comparing emissions inventories, cities could learn best practices from others that are situated in similar geophysical conditions.

There is a compelling case for moving geographic emissions inventories to a point where the emissions footprint can serve as a good indicator of regional resource use and efficiency.

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Kumar Venkat is president and chief technologist at CleanMetrics Corp., a provider of analytical solutions for the sustainable economy.

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